Reich’s new work is the best statement since Karl Polanyi’s 1944 masterwork, The Great Transformation, of how markets are creatures of government and politics rather than a default state of nature. As Reich writes, “Government doesn’t ‘intrude’ on the ‘free market.’ It creates the market.” (Polanyi likewise wrote, in a famous oxymoron, “Laissez-faire was planned.”) Reich’s latest book is a compendium of all the ways that political power by economic elites rigs the rules of how markets work—in favor not of efficiency, but of the rich and the powerful—increasing both inefficiency and inequality. With increased market power comes increased concentration of wealth, and still more concentration of both political and economic power. More and more mainstream economists have been paying increasing attention to the connection between political power, market power, and the income distribution...
However, it’s possible that with a Democratic president, a Democratic Senate, and a Republican House with a reduced majority, some elements of the Brookings-AEI package might make it through Congress. At the same time, Republicans are still working to turn food stamps into a block grant, which would drastically cut benefits, and they have continued to try to kill the Affordable Care Act and slash other social outlays. If everything breaks right politically in 2016 (which is a big if), poverty could be modestly reduced, especially for the working poor, but the larger problems of income inequality will continue to worsen.
So which group represents the greater realism? Is it the pursuit of incremental policy changes aimed at modest reductions in poverty? Or is it work like Atkinson’s, acknowledging that a real improvement in the broader income distribution would require a sure grasp of power dynamics as well as policy changes well to the left of anything currently in mainstream debate?
In the United States the minimum wage, increasingly, is not a living wage. A few years ago, a few people interested in preserving the labor market came up with a radical idea: What if the minimum wage was a living wage? What if a person working full-time on a minimum wage made enough to live somewhere, purchase groceries and perhaps have enough leftover to save? To do this, they suggested doubling the minimum wage to $15 an hour. So far, Emeryville, CA is the first city to come close to this. In July, Emeryville, a Silicon Valley boomtown,* the minimum wage was raised to $14.44 an hour1 — the highest in the nation.
While it's still too early to issue a final verdict, there have been two initial impacts: minimum wage workers are less stressed about money, while those making just slightly above minimum wage feel stiffed. Like most rising tides, we will just need to see if it does indeed lift all boats.
For this view I have been accused, by well-meaning radical voices, of being “defeatist” and of trying to save an indefensible European socioeconomic system. This criticism, I confess, hurts. And it hurts because it contains more than a kernel of truth.
Although not a book on political movements, the philosopher Jason W. Moore’s Capitalism in the Web of Life: Ecology and the Accumulation of Capital seeks to analyze the root cause of this impasse for environmentalism: the widely-shared view that “the environment” is a separate and unique part of existence outside of capitalism that capitalism devalues. Instead of examining the degradation of nature as an aspect of accumulation, Moore proposes that nature is instead always in capital, and likewise, capitalism is always in historical natures. Nature conditions capitalist accumulation and is produced historically by capitalist relations. His argument allows us to see how dependent accumulation and the exploitation of labor are on the appropriation and reproduction of “cheap natures” (food, energy, raw materials, and labour-power — defined as “cheap” in the sense of “the periodic, and radical, reduction in the socially necessary labor-time of these Big Four inputs”). In Moore’s clearest formulation: “Capitalism is not an economic system; it is not a social system; it is a way of organizing nature.”
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